On Monday, during European trading hours, the British pound (GBP) appreciated by 0.15% against the US dollar (USD), hovering around 1.3345. This rise in GBP/USD seems to be driven by a decline in dollar strength, which can be attributed to renewed optimism regarding a potential diplomatic resolution between the US and Iran, particularly after recent pauses in military actions in the Middle East.
The U.S. military indicated over the weekend that further strikes against Iran aren’t needed since the list of targets has been fully utilized.
In the same trading session, the US Dollar Index (DXY), which gauges the dollar’s performance against a basket of six major currencies, fell by 0.25% to about 101.20.
Add to that, U.S. Ambassador to the United Nations, Mike Walz, mentioned in an interview that President Trump is inclined to provide “a little bit of space” for ongoing negotiations while military operations are currently paused, as reported by The Guardian.
This week, market participants will be closely monitoring the monetary policy announcements from both the Federal Reserve and the Bank of England scheduled for Wednesday and Thursday, respectively. Predictions are leaning towards both central banks maintaining current interest rates.
GBP/USD technical analysis
Currently, GBP/USD stands at approximately 1.3344, still near the 20-day exponential moving average (EMA) of 1.3370, hinting at a neutral view for the short-term. Moreover, the observed pattern of decreasing volatility indicates that the broader trend remains neutral.
The Relative Strength Index (14), situated around 47.00, portrays a lack of robust momentum rather than a clear directional trend.
If we look at potential movements, immediate resistance can be found at the downtrend line around 1.3467, with a notable high of 1.3558 reached on July 15. On the flip side, last week’s low of 1.3300 serves as significant support, while the low from June at 1.3140 offers additional cushioning. A decline below 1.3140 could push the pair closer to the psychological threshold of 1.3000.
economic indicators
Bank of England interest rate decisions
The Bank of England (BoE) announces its interest rate decisions after each of its eight meetings scheduled for the year. If the BoE is optimistic about inflation trends and raises rates, it often boosts the value of the British pound (GBP). Conversely, a dovish stance that keeps rates steady or lower tends to put downward pressure on the currency.
Next release:
Thursday, July 30, 2026 11:00
frequency:
irregular
consensus:
3.75%
Previous:
3.75%
